New Delhi: The new US law empowering President Donald Trump to impose tariffs of up to 100 per cent on Indian goods is a major concern as it is creating uncertainty over the otherwise healthy trade relations between the two countries, and such duties, if imposed, could severely disrupt India’s exports to America, according to exporters.
However, the likely impact on Indian exports can be assessed only after Washington announces the tariff rate, product coverage and implementation schedule.
They added that the Russia-Ukraine war and West Asia crisis have already pushed up raw material prices and transportation costs.
Trump September 18 signed the Sanctioning Russia and Iran Act, which may impose steep levies on Moscow and its top energy buyers.
The Act authorises President Trump to impose tariffs of up to 100 per cent on countries buying Russian oil and gas, including China and India.
The law comes into effect within 30 days of signing by the President and requires him to impose duties of up to 100 per cent on goods imported from countries that are the top five purchasers of Russian crude oil or natural gas by total volume during the 12 months preceding enactment.
“We are very worried and concerned. If the US imposes high tariffs, it will completely halt our exports to the US. No importer can afford this high level of tariffs,” Federation of Indian Export Organisations (FIEO) President SC Ralhan said.
He said many engineering sector exporters have significant businesses in America and the US should factor in these aspects before taking any decision on new duties.
Sharing similar views, Mumbai-based exporter and CMD of Technocraft Industries Sharad Saraf said that more than tariffs, the uncertain environment impacts more.
“The clear impact can be assessed only after we have the details. We also have to see how much duty will be imposed on our competitor nations like China. We are quite worried about the new law because it is creating a lot of uncertainty in the otherwise healthy trade relations. We are not able to take decisions,” Saraf said.
He said the move could be a pressure tactic on countries like India by the Trump administration ahead of the US midterm elections in November.
Import duty makes goods expensive in the importing country. Besides, a few other factors also play a role in this. For example, duties on India’s competitor nations such as Bangladesh, Vietnam and Thailand, and the quality and standards of items.
Trade Promotion Council of India (TPCI) Chairman Mohit Singla said that the US move is a cause of “major worry” for Indian exporters.
“If imposed, it can severely impact certain sectors. It can create disruptions in the business relations of the two countries,” Singla said.
Another exporter with major exposure to the US market said the American authorities should recognise that the world is a globally integrated village and that countries need each other.
He said any policy decision should ensure that the balance of trade is not disrupted.
Leading leather and footwear exporter and Farida Group Chairman Rafeeq Ahmed said 65 per cent of his company’s total exports go to the US, and any further increase in duties would hurt shipments.
Think tank GTRI said that the new US law puts India at direct risk of tariffs of up to 100 per cent and may be used to pressure New Delhi to cut Russian oil purchases and accept an unequal bilateral trade agreement, perhaps in return for restoring the 18 per cent rate offered in the February 6 joint statement.
“India should not trade its energy security for temporary tariff relief. Neither signing a trade agreement nor ending Russian oil purchases will protect India from future US action under Section 301, sectoral tariffs or other trade laws,” GTRI founder Ajay Srivastava said.
The US has imposed new tariffs even after signing trade agreements with major partners such as the EU, Japan and South Korea, he said, adding that India should therefore not allow American tariff threats to determine its energy policy.
BILATERAL TRADE:
India’s main exports to the US included drug formulations and biologicals, telecom instruments, precious and semi-precious stones, petroleum products, vehicle and auto components, gold and other precious metal jewellery, ready-made garments of cotton, including accessories, and products of iron and steel.
Imports included crude oil, petroleum products, coal, coke, cut and polished diamonds, electric machinery, aircraft, spacecraft and parts, and gold.
The US is the largest trading partner of India. During April-August 2026-27, India’s merchandise exports to the US grew 6.17 per cent to USD 42.8 billion, while imports increased 29.6 per cent to USD 28 billion.
In 2025-26, bilateral trade grew 6.5 per cent to USD 140.76 billion from USD 132.2 billion (exports USD 87.3 billion and imports 53.45 billion) in 2024-25.
As per reports, India’s software services exports to the US in FY26 stood at about USD 120 billion. Both sides are looking at taking the bilateral trade to USD 500 billion by 2030.
PTI
